Community Bancorp Q3 Earnings Rise 7% Y/Y on Strong Loan Growth

Shares of Community Bancorp CMTV have fallen 1.6% since reporting third-quarter 2026 results. This compares with the S&P 500 index's 0.7% return over the same time frame. Over the past month, the stock has inched up 0.5% compared with the S&P 500's 0.5% advance.

Community Bancorp reported third-quarter 2026 earnings of $5.1 million, up 7.24% from $4.7 million in the year-ago quarter. Earnings per share increased 8.3% to 91 cents from 84 cents in the prior-year quarter. Total revenues, comprising net interest income and non-interest income, reached $13.56 million, up 7.6% from $12.61 million a year earlier.

For the first nine months of 2026, net income increased 14.72% to $14.1 million, while earnings climbed to $2.53 from $2.18 in the prior-year period.

Net interest income rose 10.89% year over year to $11.7 million from $10.5 million, driven by loan portfolio expansion and higher lending yields.

Interest and fees on loans rose 7.59% to $15.3 million. However, interest expenses on deposits rose 6.46% in the third quarter of 2026, partially offsetting the improvement.

The net interest margin expanded to 4.11% from 3.79% in the prior-year quarter and 3.95% in the preceding quarter, indicating improved profitability from interest-earning operations.

Total interest income increased to $16.25 million from $15.42 million, while total interest expenses declined to $4.59 million from $4.91 million in the prior-year quarter.

Total assets stood at $1.23 billion as of Sept. 30, 2026, increasing 0.44% year over year but declining $56 million from the end of 2025.

Gross loans increased $60.3 million, or 6.26%, year over year to $1.02 billion. Growth was supported by existing cash balances, securities maturities and additional core deposits.

Total deposits increased $35.5 million, or 3.52%, year over year to $1.04 billion. However, deposits declined $26.9 million, or 2.51%, from the end of 2025, reflecting cyclical fluctuations in municipal and business accounts.

The securities portfolio decreased 21.74% from the end of 2025 to approximately $113 million, reflecting changes in the company's liquidity deployment.

Provision for credit losses increased to $473,000 from $258,000 in the year-ago quarter. Management attributed the higher provisioning primarily to loan growth.

Non-interest income declined 8.98% to $1.9 million from $2.1 million in the prior-year quarter. Income from the company's investment in CFS Partners decreased to approximately $352,000 from $591,000.

Non-interest expenses increased 5.12% year over year to $6.93 million, reflecting higher salaries, employee benefits and other operating costs.

Despite expense growth, the efficiency ratio improved to 51.1% from 52.3% a year earlier. Return on average assets increased to 1.67% from 1.58%, while return on average shareholders' equity decreased to 16.46% from 17.40%.

Shareholders' equity increased to $120.8 million from $111.9 million a year earlier. Book value per common share improved to $21.53 from $19.64 in the prior-year quarter.

Fully tangible book value per share increased to $19.47 from $17.58, while the tangible common equity-to-tangible assets ratio improved to 8.95% from 8.13%.

The total risk-based capital ratio strengthened to 16.17% from 15.34%, supporting the bank's capital position.

However, unrealized securities losses reduced equity by $13.4 million compared with $10.5 million a year earlier, reflecting unfavorable movements in bond valuations.

President and CEO Christopher Caldwell highlighted improving earnings, tangible book value growth and the net interest margin exceeding 4%. Management also emphasized its efforts to control operating costs despite ongoing expense pressures.

Community Bancorp declared a quarterly cash dividend of 26 cents per share compared with 25 cents in the year-ago quarter. The dividend is payable Nov. 1, 2026, to shareholders of record as of Oct. 15, 2026.

The dividend payout ratio declined to 28.57% from 29.76% a year earlier, reflecting stronger earnings relative to distributions.

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This article originally published on Zacks Investment Research (zacks.com).